Futu Announces First Quarter 2024 Unaudited Financial Results

Core Viewpoint Futu Holdings Limited reported its first quarter 2024 financial results, highlighting significant growth in client numbers and trading volumes, despite a decline in net income and gross profit compared to the previous year. Operational Highlights - The total number of paying clients increased by 23.5% year-over-year to 1,887,270 as of March 31, 2024 [2] - Registered clients rose by 15.4% year-over-year to 3,812,326 [2] - Total users grew by 12.3% year-over-year to 22.5 million [2] - Client assets increased by 11.2% year-over-year to HK$517.9 billion [2] - Daily average client assets were HK$480.0 billion, up 6.0% from the same period in 2023 [2] - Total trading volume for the first quarter was HK$1.3 trillion, a 9.5% increase year-over-year [2] Financial Highlights - Total revenues rose by 3.7% year-over-year to HK$2,592.5 million (US$331.3 million) [3] - Gross profit decreased by 3.9% year-over-year to HK$2,122.2 million (US$271.2 million) [3] - Net income fell by 13.1% year-over-year to HK$1,035.1 million (US$132.3 million) [3] - Non-GAAP adjusted net income decreased by 11.6% year-over-year to HK$1,121.1 million (US$143.3 million) [3] Management Commentary - The CEO noted a 330.8% year-over-year increase in new paying clients, totaling 177,000, which is over 50% of the full-year guidance [4] - Strong growth was observed in new markets, particularly Malaysia, where over 100,000 registered clients were attracted within six weeks of launch [4] - Despite market depreciation affecting client holdings, there was strong net asset inflow across all markets, especially in March [4] - Total trading volume increased by 40.0% quarter-over-quarter to HK$1.3 trillion, driven by heightened client interest in technology and high-dividend stocks [4] Wealth Management and Client Services - Total client assets in wealth management reached HK$64.0 billion, up 72.8% year-over-year [5] - The company had 430 IPO distribution and investor relations clients, a 21.8% increase year-over-year [5] Revenue Breakdown - Brokerage commission and handling charge income was HK$1,082.1 million, a slight increase of 0.3% from the previous year [6] - Interest income rose by 4.6% to HK$1,354.2 million, driven by higher margin financing income [6] - Other income increased by 23.7% to HK$156.2 million, primarily due to higher fund distribution service income [6] Cost Structure - Total costs increased by 61.7% year-over-year to HK$470.2 million [7] - Interest expenses surged by 139.1% to HK$312.8 million, mainly due to higher costs associated with securities borrowing and lending [7] - Selling and marketing expenses rose by 107.1% to HK$292.7 million, reflecting the increase in new paying clients [9] Profitability Metrics - Income from operations decreased by 15.1% to HK$1,192.7 million, with an operating margin decline to 46.0% [11] - Net income margin fell to 39.9% from 47.7% in the previous year [12] - Basic net income per ADS was HK$7.53, down from HK$8.54 in the first quarter of 2023 [13]